The crude oil tanker industry is undergoing a structural shift, marked by a dramatic contraction in newbuild deliveries and an increasingly aging fleet. With only 17 crude tankers (2.5 million DWT) delivered in 2024—the lowest in 36 years—the fleet has grown by a mere 0.2%, making it the slowest expansion in over two decades. Meanwhile, scrapping activity has picked up, removing 1.7 million DWT from the market. While this has temporarily bolstered freight rates, it raises pressing concerns about the sustainability of the sector.

Aging Fleet: An Operational and Regulatory Time Bomb?

One of the most striking takeaways from BIMCO’s latest report is that the average age of crude tankers has now reached 12.8 years—the highest in 26 years. Even more critically, 19% of the fleet is now 20 years or older, accounting for 18% of total crude tanker capacity. While some of these vessels may continue operating in the so-called «parallel fleet,» a growing proportion will soon face retirement due to regulatory pressures, rising maintenance costs, and tightening environmental regulations.

This aging trend presents two major challenges. First, older vessels require higher operating expenditures, particularly in insurance and compliance costs. Second, as decarbonization efforts intensify, these tankers will struggle to meet evolving emissions standards, limiting their access to premium chartering opportunities. Without a clear and accelerated replacement strategy, the industry risks a supply crunch in the coming years, particularly in the VLCC segment, which saw no new deliveries in 2024.

Newbuild Order Book: Too Little, Too Late?

The tanker market’s sluggish fleet expansion is largely a result of historically low ordering in 2022, when contracting plummeted to just 3.2 million DWT—83% below the ten-year average. Although new orders rebounded in 2023 and 2024, pushing the order book-to-fleet ratio from 2.8% in early 2023 to 10.4% at the start of 2025, the recovery remains slow. With deliveries extending into 2028, the industry may face a prolonged period of constrained supply before fleet renewal meaningfully accelerates.

Moreover, while new orders signal progress in decarbonization, the pace of transition remains sluggish. Currently, only 3.6% of the crude tanker fleet can operate on alternative fuels, with another 2.7% retrofit-ready. In contrast, 18% of future deliveries will be built with alternative fuel capabilities, and 29% will be designed for easier retrofitting. While this represents a step forward, it is still insufficient to drive a swift and impactful green transition across the sector.